State lender Bank Mandiri, South Korean financial group ink MoU

State-owned lender Bank Mandiri signed a memorandum of understanding (MoU) with South Korean NongHyup Financial Group in Jakarta on Monday on the development of several banking services in the country.

The agreement, which is the second to be signed by the two parties, covers cooperation in corporate financing, trade financing, remittances, financial technology (fintech) development and agriculture financing.

"Besides infrastructure, the agriculture sector in Indonesia is still facing challenges to accelerate [economic] growth," Bank Mandiri vice president director Sulaiman Arif Arianto said, adding that his bank’s portfolio also included agriculture despite its specialty in corporate loans.

Bank Mandiri, the country's largest lender in terms of assets, started cooperating with the South Korean group last year through several activities, such as the transfer of knowledge in agriculture business expansion, including strengthening farmers' financial capacity, agriculture loan guarantee, agriculture insurance and agriculture infrastructure construction.

NongHyup Financial Group is well known for its expertise in the agriculture sector. One of its subsidiaries, NongHyup Bank, is the sixth-largest lender in South Korea with a rural strong network."The first MoU established the fundamental framework [for the partnership]," NongHyup chairman and CEO Kim Young-hwan said. "With the second one, we expect to complete the cooperation." (bbn)